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Granny flats provide affordable retirement housing alternative as costs soar


As Australia becomes one of the most expensive countries to retire in, many older Australians are struggling to afford the rising costs associated with moving into a retirement village. Instead, they are turning to alternative options such as moving into a granny flat in their family’s backyard.

According to Vito Russo, founder of Australia’s largest relocatable granny flat manufacturer, VanHomes, demand for affordable granny flats has soared over the last two years.

“We are being inundated with enquiries from older people downsizing who want to move into easier, flexible and more affordable housing,” Russo said. “They have done their homework and looked into the cost of building a granny flat onsite or visited a few retirement villages and centres and come to the conclusion that the cost of retirement living is simply too high.”

Russo noted that faced with the option of having to sell their family home to move into a basic room in a retirement village and then having to pay hundreds and in some cases thousands of dollars each month for services, financially, it simply doesn’t stack up for many retirees.

Over 100 granny flats a week are being constructed in NSW, representing an increase of over 300 percent in five years, as homeowners see a growing opportunity to help their elderly parents and also earn some income.

Research suggests about one in five Australians live in a multi-generational household, and that number is on the rise, with similar trends seen in Canada and the United States.

Russo said living in a granny flat in a family member’s backyard gives older parents the best of both worlds, allowing them to maintain their independence while still being in close proximity to the rest of the family.


“For many, it makes better financial sense, because retirement homes are very expensive. According to the latest statistics, a home in a retirement village can cost anywhere on average from $400,000 to $700,000 depending on the location, and sometimes the cost can be more. Then on top of this, the ongoing fees can be in the hundreds to thousands each month,” he said.

Other reasons cited for the growing popularity of granny flats include older Australians feeling safer living close to family amid rising crime rates, concerns about the risk of getting COVID in a retirement village, and the ability to provide instant childcare for grandchildren.

Russo said a granny flat can also add significant value to a property through its ability to generate revenue and expand a family’s living space, while also providing a comfortable place for loved ones to live close by for a fraction of the price of other options.

He noted that opting for a fully relocatable expanding granny flat, such as those offered by VanHomes, can also help avoid building red tape and delays.

“From as little as $65,000 plus delivery, they can get a studio or for just over $100,000, they can get a two-bedroom expanding granny flat. A simple set up like this is good for families just wanting to add a little extra room to their house for their parents to move in. It really depends on the needs of each family,” Russo said.

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